Montenegrin government introduces new excise tax for highway construction

The decrease of oil prices in the world market was the reason that the Montenegrin government decided that through increasing taxes on fuel they could find the means to finance part of the funds for the construction of the highway. The government has predicted that for every liter of sold fuel that is taxed there is an additional five cents for the construction of the highway. Under the new fiscal measures the strategy will expand with further taxation and increase excise taxes on cigarettes and alcohol.

Shortly after the drop of fuel prices, Montenegrins learn that on the eve of the construction of the highway they will rise again. A fee of 5 cents per liter will be used to finance part of the highway. The minister of Finance believes that it will not burden the budget of the citizens. “I think in a situation when fuel prices dropped drastically, it is just a small part in my opinion, and this is the position of the government, that we must find some space that will not compromise the standard of its residents and from that finance the development of the state”, says Zugic.

After fuel, an increase to the price of alcohol, carbonated drinks and cigars might follow, for which is planned an increase in excise duties, as well as taxes on coffee and gains in games of chance. All of these profits will go towards construction of priority sections of the highway.

The introduction of fees is part of the economic reforms of the state in the period 2015-2017, which were adopted at the last session of the government, and it will increase, according to official estimates, the budget revenues to nine million.

The increase in excise and changes of necessary laws will be followed in the second half of this year. “In accordance with the government Program for this year, amendments to the Law on Excise Tax are planned for the second quarter of 2015. In order to further harmonise excise policy with EU legislation, reviewing of this law will gradually increase excise rate for excise goods, which will be proposed to the government after the analysis of their impact on the budget and business environment”, it was announced by the ministry of Finance.